Bitcoin surges 43% in Q3, faces challenges from high Treasury yields

by@Cointelegraph

Summary

Bitcoin experienced a significant surge of 43% in the third quarter of 2026, marking its best performance since 2017, although challenges lie ahead due to Treasury yields exceeding 5%. This rise came amidst a shift in investor sentiment towards the “debasement trade,” which involves the belief that government borrowing and currency expansion will diminish the dollar's purchasing power. Furthermore, the weaker-than-expected jobs data, which revealed only 29,000 new jobs were added in September compared to the projected 80,000, has led to a decrease in expectations for an October rate hike by the Federal Reserve, falling from over 75% to around 24%. This cooling outlook gives Bitcoin some breathing room, but rising Treasury yields continue to pose a threat as they attract investors seeking safer returns.

Tokens

$BTC

Analysis

Bitcoin: Bitcoin is the original and largest cryptocurrency by market capitalization, functioning as a decentralized digital asset often viewed as a store of value. In the reported news, it delivered its strongest third-quarter performance since 2017 amid shifting macroeconomic conditions, including high Treasury yields and changing Federal Reserve rate expectations that test the sustainability of its rally. John Williams: John Williams is President of the New York Federal Reserve Bank and a current voting member of the Federal Open Market Committee. In the news context, he stated there is no urgency for additional policy actions after the September rate decision, reflecting a cautious approach amid evolving economic data. Vanessa Grellet: Vanessa Grellet is managing partner at Arche Capital, a venture firm focused on crypto investments. She is quoted in the news highlighting that the debasement trade, driven by concerns over persistent government deficits and borrowing costs, supports Bitcoin demand independently of low interest rate environments. Monetary Policy: Federal Reserve officials have signaled patience on further rate actions following the September meeting and signs of labor market cooling. Investor Sentiment: The debasement trade is gaining traction among investors focused on federal deficits and government borrowing as a driver for Bitcoin demand.

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